Plan for Miami low-income housing unveiled

Advocates for Miamians who live paycheck-to-paycheck are unveiling on Thursday an ambitious program to build as many as 1,000 new affordable housing units designed to prevent families from falling into homelessness.

The program, which is being spearheaded by the Miami Coalition for the Homeless, aims to raise millions of dollars in private investment to encourage area developers to set aside units for “extremely low income” residents — renters who earn the minimum wage, or only about 30 percent of the city’s median income. Persuading developers to build such housing is enormously difficult without government or private subsidies.

“These folks are the most likely to fall into homelessness,” said Barbara A. “Bobbie” Ibarra, the coalition’s executive director. “If one thing goes wrong — you have a medical problem, or your car breaks down and needs to be repaired — you are right at risk of falling into homelessness.”

The program the coalition is seeking to replicate was developed in Boston by a group called Home Funders. During a 10-year-period, Home Funders helped create 3,299 affordable housing units in Massachusetts, 1,018 of them designated for families of extremely low income. The effort was considered such a success that the group is gearing up to build hundreds of additional apartments.

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Here’s how the program works: Administrators hope to raise $5 million to $10 million in private dollars from philanthropists, banks and investors. When the developers of low-income housing find they have a gap between the money they need and the dollars they have, they can secure low-interest loans to cover the shortfall. In return, builders must make a commitment to set aside about 20 percent of their units for families of “extremely” low income.

The county can help, as well, by awarding developers who participate with housing vouchers that partially subsidize the rent of low-income residents, and by providing operating subsidies that make maintaining properties more affordable. Typically, sustaining low-income housing properties can be as challenging as building them, said Soni Gupta, executive director of the Home Funders Collaborative.

“It’s a whole new source of private capital to fill the gaps in your development budget,” Gupta said. “And the low-cost loans help with operating budgets.”

Said Ana Castilla, the South Florida Community Development Manager for TD Bank and a board member of the homeless coalition: “It’s one thing to buy a house. It’s another to maintain it over time.”

Building 1,000 new units in Miami would cost $100 million to $160 million, Ibarra said. But the private loan fund that would create an incentive to build units for the most impoverished would require only about $5 million to $10 million, she said.

The homeless coalition already has seeded the fund with $1 million of the group’s endowment money. “The concept is, you put your money where your mouth is,” Ibarra said. “If you believe in this, show us the money.”

To be considered “extremely low income,” the breadwinners for a family of four would earn only about $20,000 a year, Ibarra said. The University of Florida estimated that for every 100 families at that income level, there are only about 33 units of affordable housing available. About 75,000 Miamians are considered extremely low income; on average, they spend more than 60 percent of their income on housing.

But without reliable housing, the lowest-income families are one mishap away from living in a homeless shelter. Shekeria Brown, who is the executive director of the South Florida Community Development Coalition, said the challenge for governments and housing advocates is to develop “creative funding opportunities” that encourage investment in units that are typically not profitable.

“Quality housing people can afford is the foundation of the community,” Brown said. “It drives everything.”

Michael Liu, director of Miami-Dade County’s Department of Public Housing and Community Development, likes the idea of riding the wave of the area’s current development boom to produce more low-income housing. He said he is wary, however, of exacerbating the high cost of housing by unintentionally driving up development costs.

“We have to be very careful that whatever is implemented doesn’t cause unintended consequences, especially with the overall market,” Liu said.

When developers are required to set aside a certain number of units for low-income residents, for example, they often recover the losses from those units by raising rents among surrounding units, thus putting pressure on the overall market to increase rents.

“I think, actually, it can be done,” Liu said. But, he added: “We have to be careful.”